Sunday, April 19, 2015

China high-speed rail fact of the day

An average kilometer of HSR track in China costs between $4.8 million USD (Jiaoji Line) to $32.7 million USD (Zhengxi Line), which is significantly less than the estimated $380 million USD to $ 625 million USD it will cost for laying down the British HSR2 project.

The cost variation is a truly stunning differential, which defies all conventional explanations.

My guess is that the Chinese estimates do not cover many requirements ('right of way' procurement etc) and excludes the massive subsidies (cheaper land and other inputs, cost of capital, tax concessions etc) enjoyed by Chinese equipment makers. Even with these and assuming the highest efficiency standards among Chinese developers, there is still a lot of explaining to do.